India Top Performer, Rallies On FII Faith
What seems to have convinced FIIs to shop for Indian stocks was the policy push, initiated by finance minister P Chidambaram, and the belief that growth might have troughed out. Of course, liquidity was abundant with most central bankers across the globe, opting for easy money policies.
“While global liquidity has rushed in to most emerging markets, compelling valuations and the fact that the government pushed through some reform added to the optimism of global investors,” said Andrew Holland, CEO (investment advisory), Ambit Capital.
India outperformed its BRICS counterparts spectacularly — Brazil’s Bovespa, Russia’s Micex and China’s Shanghai Composite added a meagre 5%, 7% and 1.5% respectively. India ranks as one of the best-performing markets globally too; major European markets have gained 6%-15% as have others including Dow Jones, S&P 500 and Nasdaq.
Money flowed in despite India’s macroeconomic headwinds, a widening fiscal deficit that could leave inflation elevated and a high current account deficit that could see the rupee weaken further. While FIIs
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